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Apr 24, 2010

Business and Ethics: Mutually Exclusive?

It’s important to note that a sense of what is ethical varies from individual to individual, from group to group, and from nation to nation (and these ethics vary over time). As every country has its own laws, values and norms, it’s important for the given company to digest itself in what can be considered ethical locally, as well as in the countries that they do business. Pinto et al (1998) stated, “for ethical decision-making, sue the law as a baseline, not as a substitute for ethics” (p. 97). Having said this, as companies are in an ever-changing internal and external environment, how they handle their own ethical practices – both internally and externally – must also accordingly. If the company at stake has business practices in more than one country, the ethics guidelines must fit within each cultural parameter and not be handles as a global manner – as this is surely a recipe for disaster. This is so because an ethical practice in the United States, for example, may not be considered ethical in Tokyo or London. Among the concepts of ethics is the nature of business ethics and the relationship between ethics and the law. Because of this relationship, a company’s understanding of business law will help to understand what is and what is not considered by a society to be ethical behavior in business in that particular country.

As a final note, even though business ethics focuses on what is considered ethic in a business environment, it’s not considered just another form of ethics – it’s still ethics applied in the business context. Pinto, et al (1998) mentioned, “When a major corporation, its officers, managers, or employees make mistakes, they tend to do it big time, with lots of lots of press coverage.” At the end of the day, businesses run the world economy so it’s empirical for them to act in a ethical manner for society’s benefit.